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tv   Fast Money Halftime Report  CNBC  October 28, 2013 12:00pm-1:01pm EDT

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much written about how disappointing the quarter may be, that's probably keeping people from saying, at least expectations are reduced. there they are. barely higher. >> see if they mention icahn or certainly guidance for q4 key. back to headquarters and check in with scott wapner and the halftime. >> what we're following today, core holding, what apple must deliver to keep the stock on the move and its competitors on edge. emerging risks. a big warning today about where investors are placing big bets abroad. live right here in the house on set with our halftime play book. stocks on pace to do something they've only done four times in the past 30 years and that's finish september and october with gains. traders are focused on several big earning reports, including apple today. econdata and the fed. josh brown, big week ahead. how are you going to play it? >> so, as i've said repeatedly
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on the show, breadth and internals most important thing to be watching. it's very difficult to pay attention to anything else. what thmarket is telling you, s far the untrend is healthy, not seeing leadership narrow, not seeing a handful of sectors or stocks driving the action. it's broad based and sectors that have had no participation up until let's call it september are now starting to catch a bid. materials, energy. so that's what i want to focus on if i'm long the market. breadth stays healthy, no reason to look for any countermove. >> maybe as rates come down, you're still going to get some of the yield plays that look good to investors. >> yes. and the reason is, if you have log lagged the market and looking for an opportunity to get in, you're going it to buy
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defensive stocks because of the title of the sector. that's what you're starting to see. materials are a different story, that's from market participants, i think you go more. i don't buy the underlying story here. right now i've taken off a little bit in terms of some trading positions, not a lot because i think the market's tired here and should consolidate. that doesn't read 5%, 10% down, it means trades are run their course. i'd like to see cash. >> we like the materials? >> we started buying materials halfway through the year. started out as val indication but technically a massive move to the upside through several layers of resistance. what i can tell you on the fundamental side, to steve's point, clearly, there are issues. but the market is well aware of those issues. and i think you've been rewarded by anticipating the issues not being as bad as what everyone suspects and that's what's happening with stocks right now. >> i want the real money view on
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the market from anthony. where would you say hedge funds are trying to position themselves for the last two months of the year? knowing that several have underperformed the market. >> getting long stocks because on a relative value basis stocks are cheaper than other asset classes. in addition, you're going to see positive signals from the fed in the continuing of the purchasing program. so, that combination augers for a higher stock market by the end of the year. >> doc, do you see that going forward here? you have a big week, right? you're going to get the tone set tonight with apple, the fed meeting midweek, a lot of economic data, today pending home sales were a whimper for certain. >> they were a whimper. you're exactly right, scott, about apple setting the tone for the week because that could be a very positive tone going into the two-day fed meeting or a negative one. i'm not looking for the negative one. i'm looking for the positive one here. i believe a lot of metrics we've talked about with the iphone 5s
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and the new ipad which is not any part of this report, the ipad sales, and ipad air and all of the rest, retina, minis and so forth, i think that's hugoing forward. we although that they're not going to exactly give us a great look into the future as far as guidance, judge, but i don't think they need to. i think it's a very strong quarter, upcoming for apple, perhaps their biggest quarter ever in terms of revenue. >> where else do we want to be positioned for the final two month trade? do we like materials? where's money going to be made in november and december? >> i think the money's going to be made in big cap biotech. they've continually come out with good news, gill add on friday, biogen, where you can make money. if you look out just one year, two years, you are going to see stocks, selling at a discount to the market multiples. i think you've got huge, huge
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growth. you can go there. what you'll see temper continually are autos but the -- >> maybe bristol-myerss a name though it's not a traditional biotech, it's morphed into that you can play that like it's being played today on positive date it. we like bmy? >> the story always there is, is it an exit story? are they going to sell? it's run by a good management team, done extremely well. i think you get a bigger bang. >> the answer, where the money's going to be made? i could make the case a meltup in emerging markets, they're down 6% year-to-date versus every other geography which is up substantially. that's an area where hedge funds can taye, this doesn't feel criminal buying markets at china, 10, 11 times earnings, india, 10, 11 times earnings. that could be the next area where the puck is going.
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>> josh, by the way, real quick, one of the stocks that's a big percentage of that eem is petra brass. over the last couple of days, three in particular, big upside call accumulations to josh's point. samsung very big in that particular etf. >> i mentioned we're going to have a broader discussion of what's taking place in emerging markets. where investors are placing bets unknowingly as well. we'll talk about that coming up. what you haven't mentioned, beyond biotech, beyond materials, financials. >> you know, so that's where i think the big of the amount of money's going to be made by year-end. positive ipo season, m&a growth. guys had disappointing quarters and that set up expectations for a couple of earning surprises by year end. stocks like goldman sachs, bank of america, jpmorgan, do well by
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year end into the first quart of 2014. >> i own all of those except jpmorgan and i agree, still my biggest overall weigh in sector financials, i think a very strong quarter and extremely cheap stock. >> wait until you hear our next guest's prodictiediction about year. joining us once again, milton, good to see you. >> good to be back. >> prepredictidiction next year. >> it's really easy when you look at the value. you mentioned earlier in the show, one of your guests mentioned earlier, that stocks are really the best value in all asset classes. there's still boatload of money sitting in cash. the great rotation out of bonds barely begun. a lot of upside. >> why do you think the rotation is going to even begin ever? i mean if it hasn't happened to this point amid all of expectations this year it would have started, what's going to force the money out of the bond
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market and into stocks in a meaningful way? >> i think that what happens here is that particularly in the retail area, but also in institutions get their statements whether it's the end of the quarter, weekly, monthly, realize they're losing on a relative basis not being in stocks. after this year, a lot of the people had a net loss in bond portfolios. i'm not downplaying bonds here but i'm saying that stocks offer more value and their track record looks really good. we've lad two good up years in stocks. the retail area will realize they've been missing out and typically they chase it. >> the argument has been used to justify a lot of the bullishness that we're now seeing in the market which we haven't seen in years. but what do you make of the argument that, from a sick cali adjusted basis, p/e ratios are fairly high, you've never made money buying in on a cape of 22
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or above, how do we get over that argument because it seems to be ubiquitous in bearish circles on the street. >> when you compare stocks to bonds, because the yields, even on the junk, the yields are historically low. when you look at cash, where you're effectively losing money on a purchasing power basis, there is no place to go within the u.s. market. and -- in equities, if you want to keep in the dollar ago, it's your only option. you're getting dividends alone better than most bonds. of course, there's the appreciation we've seen and most people tend to extent that line. we think that that tendency will extend the line. >> as long as you have what anthony has said repeatedly as a liquidity-driven market, as long as you have the fed not tapering, is there anything known that drives stocks lower? because earnings, though they
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have been okay, haven't been able to do to it. congress in all of their nonsense down there for the most part hasn't been able to do it. stocks back near record highs. what is it? >> you can invent something. there could be a war. we can go to war in the middle east. if you ordered me to make a bearish scenario i suppose i could. it's a question of likelihoods. take congress, they have all of this nonsense, three-ring circus, in the end they agreed to differ and postpone the decision. it's not good but it's not the worst the market expected and the market can move up in response to the relative value. i don't think even with all of the nonsense we're anticipating in the new year, because all they did was postpone for a few months, we're going to see anything different. the market will be able to breeze through it as long as the relative value is there, as long as the liquidity is there, and those are strong likelihoods. >> we've talked about materials getting a bid. we've talked about the strength in bioteches and financials. where would you place your biggest bets now?
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what part of the market? >> we like the financials. there's a good play there. we also think in all of the economically sensitive areas, you have the technology, the industrials, the consumer, discretionary as opposed to the consumer staples. there's a lot of talk about this christmas being disappointing, this holiday season being disappointing. it may be, but there's been this talk all along, we think the discretionary position to a pleasant surprise, even if it's not a particularly robust holiday season. >> interesting. milton, be well, talk to you soon. >> take care. >> the big risk, scott, unpredicted rise in interest rates. they say that sounds crazy because the fed is overwhelming the markets with its purchasing. but that is an risk. there could be a sell-off in bonds somewhere in the world that unsettles the allocation plan. that's the only near-term risk
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that i see. >> i don't see that happening. i was surprised by the ten-year dropping below 250 briefly. i think it's very measured, abetted by what we saw in washington where the economy's slowed because of that. it's a risk but it's not a risk -- >> by clearly making the point, i think the bigger point here is you are 0 to work hard to keep coming up with risks, right? as long as the fed is doing what it's doing. >> expectations may be too high. you know, that's one of the issues. >> scott, he couldn't answer the question. other than stocks relative to bonds, you know, there's -- look, you don't have revenue growth, you barely have earnings growth. >> sure. the market barely cares. >> you have a multiple that, quite frankly, is not in a lower core tile, lower 50%. >> it's below average, by definition. >> right on the line. >> 15 years from now, economic historian will say about this
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verizon terrema market, the fed induced, the economy was okay, not great. >> courtney reagan breaking news regarding jcpenney, right? >> that's right. i'm here at women's wear daily a sum hit mere. the ceo doing a presentation casual with the q&a and did reaffirm the company's previous guidance saying they will return to the positive same-store sales numbers coming out of the third quarter. i understand the stock moved higher on that news. ullman using a lot of numbers reminiscent of what we've seen from ron johnson, saying 200 days in. there are 30 things the company needs to fix but think they are fixable. he noted that he believes they lost about 20 million households but gained 10 million new households. still a net loss of 10 million. a lot of numbers, it seems as if he's being very particular about
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the words that he's using and how he's describing jcpenney's current position going into the holiday season. the stock is moving higher on mr. ullman's news. he has finished his presentation for the day. >> higher by nearly 6%. are you still short. >> i am still short jcpenney. >> worried about the position? i ask it in the context of mow m momentum across the board? whether it's teslas and facebooks and now the momentum on the downside and that stock's going it have a meaningful gain over the next weeks, couple months? >> the short interest is going to cause a lot of volatility. what ullman said is nothing new. they can put up same-store sales up 5% but if they lose money, that's going to drive the stock lower. repricing this continually, they keep saying the same thing. they'll say the same thing at
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five bucks, too. >> twitter kicking off the road show. should you be a buyer next week? the twitter trade after the break. is apple losing steam? despite its recent gains. apple down more than 1% year to date. coming up, find out what investors between hear from apple when they report after the bell. that and much more coming up. with fidelity's options platform, we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity.
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we started twitter with a simple idea. we started because we wanted to see it we loved it we kept building it because we wanted to see other people use it. >> in custody, nobody inside the perimeter. >> able to have multidirectional conversations. not just broadcasting you're there in the middle of it. there's a incredible leveling of the playing field that gives every voice the ability to echo around the world instantly. >> welcome back. that was a clip from twitter's road show pitch, a preview of what the company will underscore to investors are this week with the ipo expected in mid-november. around the horn to see who will be a buyer. weiss, compelling sales pitch? is it a compelling stock? >> depends on the stock.
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we've seen ipos, facebook, the pricing runs away. if it runs away, i wouldn't play. >> doesn't seem it's going to be. erring on the conservative side. >> exactly. the best thing to the ipo what happened to facebook's ipo, you've got goldman will make sure you don't have the fake interest. allocate deelz, the toughest thing is separating liars from the buyers. everybody says they want to own it, own 10% of the company but as soon as it starts trading they hit the build. goldman will take great care, allocate intelligently. i think the deal works if the price is near the range. >> your point of view on what you're hearing from the people that you invest with and speak to, what the hedge fund few of twitter is going to be. >> it's decidedly bifurcated, guys will own the stock for ten seconds, flip, expect ipo premium. twitter's another media source. it is a social media company but
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it's also a broadcast network for information. and once these guys figure that out and build it into their business model, this is going to be a terrific company. facebook is down today. i anticipate people are selling facebook to get long twitter. this is a likely very good long-term hold for people that like social media and these internet stocks. >> guys? what about you, doc? clamoring to get into this? do you recommend that people take a look at it? >> i agree with what steffan and josh said. if you get it at right price, i would buy it. if it prices at 20, judge, you see a pop up to 25% right away. and just anthony's point, some of the flippers will sell it right there. i will buy more at that level. i believe you'll see a move of about 40% out of this, out of the first two days. i don't think it does the facebook where it pops up and pulls all the way back down and is unchanged. i don't think you're going to see that out of this one. at least not in the first couple
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of weeks. but then it depends on price after that. >> does the fundamental twitter story need to include something like i think it was jim cramer who said something beyond twitter? something beyond just the practice of tweeting? is that enough? for reason to invest or does there have to be another part of the story that we don't know yet? >> there is another part of the story no one's talking about which is commerce. if and when they choose to go down that road, forget it, all bets are off. forget about the data they could see and the in line ads. that's not in anyone's estimates. i'm playing twitter simply, buying on the first day, i almost don't care where it opens because it doesn't have to be my final purchase. and if if tulls back, fantastic. i can't predict it. >> no one's factored in the free advertising that twter guests. every broadcaster puts their --
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where are you at? >> scott wapner. >> dying to get more followers. there's hundreds of millions of free advertisinging in the space. it's acting as a gravatron for people. the amount of people that added to twitter, it's exponential. they'll figure out a way to monetize this the same way facebook figured out way to do it. it's not clear twitter's a standalone company. microsoft could buy twitter help with search business. >> to answer cramer's statement, no, it doesn't need to do anything more than be twirt. >> why not? >> they own the space. they absolutely own the space. getting more and more people in it, more and more companies. it's a great advertising mechanism. hits you quickly. they'll grow mobile revenues dramatically. that's in why not. >> thought it was a good point.
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another highly anticipated event after the bell, when apple reports earnings. ubs analyst joins us. welcome back. what will you be mostly looking out for? >> well, the guidance for the december quart, they've preannounced this quarter would be at higher end of the range. looking out to december quarter, the first real sense of what the demand for the new products is likely to be, not only iphones but the new ipads. we expect revenue guidance around 55 billion. gross margin, 36%, 37%. we can derive earnings number. consensus around $14, i think they can do better than that. also looking to see if there's a real sign of sell through. apple recognizes revenue on sell into the channel but sometimes talk about what the sell through is. we want a sense of that. >> if there's an area where a miss is most likely to come from or a disappointment relative to how high expectations are always with this company, where's that going to be what line is that
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going to be on? >> the last year it's gross margin. we feel good about gross margin going forward. some risk with deram prices here. there's question about their able to supply. obviously 5s in short supply. we think the retina mini in short supply as well. that could hit the revenue guidance. we want to hear more about the ability to make the fingerprint technology and get the 5s out and volumes of the retina mini. >> if i were to say the market's up 20% year-to-date, apple down 1%? what is the number run reason the stock's down relative to a big, big, big market? the tshfact that earnings estims have come down and most is gross margin. the mini has taken the gross margin down significantly and that's concerned investors. that's why if they can keep the gross margin flat to up here
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during the product cycle, it's probably going to help the stock. something else that could help the stock the fact that the big cap stocks particularly the ones that i follow have blown up. and apple's not as vulnerable to the enterprise spending. you could see more money flowing into apple in large cap tech. >> your take on icahn? i asked you before. but we've spoken with carl icahn live the other day, testify the waters of a proxy thing if he doesn't get his way. how much legs are there? >> i think it's going to come in and out. i mean he's got a point, the company hexcess cash. i don't think the bore's going to be pushed to do something too soon. the focus is on new products. tim cook promised the world there will be new product from apple, we assume new product
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categories and they want to see it play out. it's an admission of weakness and failure for the company to do a huge repurchase. i don't think we'll see that. >> you don't think they should? you're an influential analyst. you look at numbers, you get a question on the call. do you think they should or shouldn't? >> for now they shouldn't. longer term you can argue there's room to do more, should they lever up. the next 6 to 12 months the answer's no and they should focus on the products. >> buyer, seller on apple? >> a buyer, i'm long apple into this report. scott, as i've said i think they're going to blowout the revenue for the next quarter, for this coming quarter into the christmas sales. 22.86 million ipads sold last year in the fourth quarter. they'll blow that number away because of the demand for the ipad mini with retina and if you want to trade down, if you will, to the old ipad mini for 299
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versus 399, that's tremendous for them. >> if you believe that, you believe doc, right, that there's just blowout and overwhelming demand for the refresh of the ipad why doesn't the stock go higher. >> i think it will go higher. >> it does. >> regardless whether -- >> say between now and the end of the year. >> stock's higher. i don't think icahn has anything to do with it. i'm not betting against carl. >> the product as loan, ipads a highly sought after device. >> look at financial statement of apple, forget about the products for a second, this is what mr. icahn's looking at, it's unbelievable business. it's spinning off tons of cash, they're dominating their space. and there's the thing about apple that most people recognize, it's still the coolest. yes, samsung's come up with product but was apple's the coolest. if they innovate in the different product categories it could be a home run stock for '14. >> a quick stock, everybody, on
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the ecosystem. >> buy apple. if you like apple, buy apple. as far as trading into earnings, last 28 quarters it's beat 56% of the time. average gain on a beat is 4%. average loss for the stock on a miss is negative 4%. >> armh, buy that. >> qualcomm, doing great. finally going through 17 and stay there. >> next, tony james selling blackstone stock this year. should you be buying what he's selling or a sign to get out? investors worried about correction in the u.s., seeking profit elsewhere. unknowingly making bets with too much risk?
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european markets are wrapping up trading now. you can get a look there. most major markets, as you can clearly see, are in the red. benchmark aeuro stock falling .1%. european automakers down graded, the momentum in the names has just come to an end. traders cool on nat gas as fuel futures fall 3% on the day. let's get more from futures now host jackie deangelis. >> new weather forecast predicting more mild temperatures for early november than originally expected. that, of course, having an impact on nat gas prices because people use nat gas to heat homes. you're trading the gas in the pits at the nymex with me. more bad news for nat gas because of the forecasts. >> the price of the future we're seeing the low for the next three, four months.
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november contract expires thursday. i think that short-term weather forecast is tieing into what that contract expiring and nobody really wants it at this point. but as i said, demand has been less. but we're at beginning of the season. so you know, you have to look as this being the bottle to. i only see prices up from here. >> jim, you're looking at nat gas. what do the charts tell you? what happens the next move? >> i think we're coming into trend line support here, the contract comes in 355, and there's a different support about 360. to me, those trend lines and support is not going to be broken until it is. we test these things all the time. the fact we trade on ten-day weather forecast is an overhang from two years ago where we had the warmest weather on record. now we trade with this global warming over head. al roker, he says something in
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the ten-day forecast we go with him. we get higher prices from here. >> let's leave it there. if you want more on nat gas and the rhett of the commodities and futures, futuresnow.cnbc. >> firing up the burger battle with new fuel. mcdonald's squeezing heinz out of its restaurants because of the ketchup inking's new ceo. which burger joint is the best bet. breaking news from consumer reports auto reliability report. any lemons in your portfolio? that and more coming up. ♪
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the battle for your happy meal. mcdonald's versus burger king. 2013 shares of burger king tripled returns of mcdonald's. dr. j. says it's all about to
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change. a big mac bet on it. we debate now. josh is the burger king bull. doc, make your mccase. >> mcdoubles animal style. josh, take the bun off, this is the best way to eat those things because then they're less on the carb side. i love the stock, shareholder friendly. i love buying it on this buyback because the expansion in india and china, this is going to drive mcdonald's over the next several years, perhaps a full decade here. so i love the fact that i'm able to buy it sub94 because of the dip this past bit. as far as burger king, don't have anything against them, like the charred grilled burger but i think mcdonald's makes more and people are making too much of the heinz deal. >> so on mcdonald's, i agree with john's points but the positives have been baked in for decades now. it's the clear leader. burger king is first enjoying its time in the sun.
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investors are doing well for the fact they are refranchising every corporate store, pulling hundreds of millions in costs out of the system, they become a much more profitable company. earnings this quarter, the reason the stock's rally, up 35%. they are sticking to what they do best, removing costs and that's why the stock is going. i would like to point out international story has barely scratched the surface. a lot more room for expansion in terms of burger king overseas than mcdonald's which has already conquered. >> raw material costs for both companies very contained. people are looking at 1.5%, 2%, and mcdonald's has a bigger ax to swing as far as getting prices down better than burger king. >> satisfries, 30% less calories. burger king might have a -- >> the battle played out here is played out everywhere because franchises are two too big. mcdonald's more so than burger
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king. talking about value. who can cut prices. both overvalued. and low growth. i'd stay away. >> added one more stock, mcdonald's, burger king or wendy's? >> dunkin' brand is. i've got to tell you, they don't sell burgers, but dnkn in three to five years could double. >> i agree. >> dunkin'? >> outperformed expectations, huge probabilities of growth. >> zero california stores dunkin' brands think about that, there satisfries. >> tell us who won the debate. use #bull or #bear. we'll give you results as we always do at the end of the show. talk about the markets here. a big warning today from one of wall street's biggest firms but how much risk investors may unknowingly be taking in emerging markets. the note got our attention, and
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gemma's here live on set. great to see you in the house. >> thank you very much. >> so let's talk about this because we have been talking about investing in i merging markets and the opportunities that lie there. they make the case that emerging market equity funds are take inordinate risk business tilling portfolios to growth sectors too much. egregiously overweight consumer and telecom names what the report says. >> we need to look at why people are investing in emerging markets and what risks they have misses. looking at a momentum-driven market and investors are missed out on this rally. they're trying to catch up. the problem is, if they're trying to catch up with a speeding car you need to move faster. looking to invest in emerging markets as a leverage play which is fine on outside but the risks are magnified, developed market risks more so in emerging markets, deficits, weak lending, weakening growth and credit
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ratings downgraded talking about india, potentially to junk level. >> you think there's opportunity to be had in emerging markets given the rally, the post-nontaper rally that many saw? >> there are opportunities but you have to be specific. again that is where the risk lies as investors investing in etfs or broad based investing they need to be specific. if you look at certain countries and markets, certain areas, there's massive risk that people aren't recognizing. >> they say the top 100 emerging market stocks, the cheap are very cheap, expensive are quite dear. where, then, do you guys see opportunity? its the current account deficit story where the massive risk is. i think that bifurcates em nations. you can say countries like india have an issue, turkey have an issue because they haven't gotten their fiscal house in order. when borrowing costs go up they have an issue from the government. but make the opposite case for
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other markets. >> hold your thought. kate kelly has breaking news regarding s.a.c. capital. >> long awaited settlement could be coming, i'm told as early as this week. as part of this nearly agreed to settlement, s.a.c. likely to make guilty on some of the charges, those include security and wire fraud. not clear what the nature of the plea will be but it means down the line s.a.c. will not be able to manage public money. once it pleads guilty it will have to be a family office, managing the money of steve cohen and employeers and shut down and reopen in other capacity. likely to be a monetary fine north of $1 billion. exact terms still developing. i'm told very close, scott. they've agreed to the broad contours of the deal and we're likely to see news soon.
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>> kate, stay with us. we're fortunate to have anthony, as i mentioned, earlier, and you've seen on the desk with us today. from a fine standpoint for steve cohen, a billion may be less than what some people expected. kate can fill us in more on than the idea of not able to manage public money anymore is a direct impact on people like you. >> look, i think it's sad for the people that have money managed by steve. he's had a great performance this year. you know how i feel about him personally. i hope this is the cycle of the witch hunting ending for the department of justice and the s.e.c. >> i understand but a guilty plea changes things a little bit, does it not? >> scott, when they paint you into the corner and they have unlimited resources, okay, and you're trying to get on with your life, it's one of the only things you can do on the diagram. okay, the department of justice and the s.e.c. are -- have gone
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crazy in these matters. look at jpmorgan, it's not just s.a.c. cohen, they're after everybody and it's unfair. i'm one of the few people bold enough to speak out about it. >> kate, you want to make a comment? >> well, anthony certainly got a strong opinion there. a lot of people think the opposite, that essentially insider trading and other ills commit on wall street have gone largely unchecked over the year. we're seeing an abundance of regulatory cases ranging from jpmorgan to s.a.c. having said all of that there's an interesting series of events that could take place and you've got a firm if it pleads guilty has to change its structure at a minimum. founder steve cohen personally sued on a civil basis. down the road we could see him barred from the securities industry. that doesn't mean he'll have to bow out entirely. he could maybe continue to advise and manage on a reduced basis but tough period for them. no doubt about it.
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>> doc? >> i'd say, kate, when you looked awhat the mark cuban with that lawsuit and the s.e.c. going after him there, and then him subsequently posting up on twitter and elsewhere on blog maverick, for instance, many of the spite that they went after him with there, to anthony's point, i'm all for getting bad players out of the markets but a lot of what has gone on with the s.e.c. hasn't been about that. instead, it's about personal vendettas and that's something that has to stop. >> you guys are putting me in the unenviable position to play the d dev devil's advocate in that your painting cohen he's the victim. if there are things that have been done and a guilty plea put forward maybe that has this change we all as a group think about ha has taken place in the role of insider trading in the market. >> scott, one way to look at it is -- >> none of us sanction insider
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trading. >> i'm saying the tone of the conversation is that mr. cohen is a victim. >> but they've got a scapegoat a few people. what they hope to do is hole those people up as an example to scare the rest of the people and mark cuban's case, they had to drop the case. look, they're upset. you guys didn't get the madoff thing right, you are on a witch hunt for everybody. why don't we stop it at this point? >> in fairness the s.a.c. case, filed in late july and the preceding case of the s.e.c. against cohen personally, this comes after years of convictions of former s.a.c. traders who acknowledges their role in some sort of insider trading. some way of looking at it u.s. versus s.a.c. case from july 25th is simply a couple minuulm that. the corporation's liable for the bad actions of current or former
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employees. so it's a follow on effect. >> no one sanctions insider trader. >> of course not. >> i don't like the witch hunting, that's all. >> let me make the point as well. there was a poll conducted earlier this year by a hedge fund association that showed astonishing number of current industry employees had seen bad activity or suspected it went on. that tells you there's an issue here. >> okay. we're going to continue to debate. >> stop the music. i want a response. >> makes for good television. bottom line, every society, any protection, doctors, et cetera, there are bad actors everywhere. what we do in the media, focus on two or three things and make it look like the whoa industry's tainted when it's not the case. when someone's answering a survey they have an inically nation to create fires. that's my opinion. and i'm going to hold to it.
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there's 2.5 trillion in the hedge fund industry for a reason. >> a record as of this year. we've seen record levels. >> let me give a news flash to the s.e.c., many blue collar workers are inside hedge funds, including sky bridge where we do a phenomenal job of taking care of them and gridiuiding them to great actuarial numbers. i hope the witch hunt is over. you'll probably get the guy to plead guilty. you had ten years to find something to plead him personally guilty and couldn't find it. he's stuck in the corner and he has to plead guilty for his corporation. i hope it's over now. >> to my understanding the government's going to do everything it can to protect the public third parties involved in the s.a.c. case. people like yourself and your investors. nothing's going to happen overnight. we may see an announcement this week of the knock-on effects of becoming a family office will happen in the future but not immediately. there's no doubt the government's going for a
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deterrent effect here. we've seen it with the $13 billion jpmorgan settlement which is a huge number and i think perhaps we're seeing it here. >> kate. we have to run. thank you very much. >> you got the last word this time. okay. >> looking out for you, kate. >> see you later. >> back after this.
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investors invest in now. carl icahn's return on his netflix stake. three other ugly duckling stocks a that could turn into swan. a major merger sparking job cuts and memo from one power house law firms that has its female associates up in arms. halftime will be back after this short break. [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪ can help you take charge of your future. so ally bank has a that won't trap me in a rate. that's correct. cause i'm really nervous about getting trapped. why's that?
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welcome back to the fast
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money time half time report. the company out with its reliability survey but before that the company announced it will stop recommending three popular toyota models because of how they performed in iihs crash tests, camry, rav4 and prius v. they're not recommending as of today the honda v 6 and nissan altima, all of this on day when they put out their annual ranking of brands recommended. the top three in terms of reliability, lexus, toyota and acura. the guys, the real news those not recommended but also ford finishing 26th out of 28 brands in the survey. some interesting developments in terms of the annual reliability survey from consumer reports. >> yeah. ouch. phil, guys, what do you do as a trade. >> i think the auto trade is a tired trade personally. right now -- >> all of them. >> yeah. all of them. >> vw. >> i think -- >> consolidate and go lower and look at it again.
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. all right. let's do final trades. around the horn, dr. j? >> pepsi buying upside calls. >> steve? >> a -- >> i like ford. >> you won the debate. >> thank you. >> anthony. >> buy morgan stanley. >> see you tomorrow. >> halftime is over. >> "power lunch" and the second half of the trading day starts right now. >> all right. folks, pick a basket, stocks in a basket. we're looking at four big areas where many investors are putting their money right now. the big caps, the s&p 500, the small caps, tech stocks, what is best for you. we'll take a look at that consumer reports out with a reliability story and ford is falling. big time. where does your car stand or your brand stand? we'll tell you in two minutes. and legal briefs too. two huge stories in the world of law, one involves a merger that could mean hundreds of

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